In this episode, we look at a few different elements of Jobs Theory using Comcast. How would you beat a cable and media monopoly like Comcast? They have built-in advantages that seem insurmountable. Can Jobs-to-be-Done methods help you beat Comcast?
Jay Haynes 0:01
Welcome to our podcast, how would you beat? In each episode, we pick a company and talk about how you could use jobs-to-be-done innovation methods to beat that company's product. We'll discuss innovation theory and explain the methods so you can put the theory into practice at your company. I'm Jay Haynes, the founder and CEO of thrv, that's t h r v without the vowels thrv.com. We help product marketing and sales teams use jobs-to-be-done innovation methods to build market and sell great products. I'm here with my colleague, Jared Ranere.
Jay Haynes 0:39
This week, we're going to focus on Comcast. Comcast, of course, is a huge company. They have a market cap of almost $250 billion. That's a quarter of a trillion dollar market cap. And they have annual revenue of over $100 billion. They own Xfinity, of course, which is their broadband service provider, which is about half their revenue. And they own other properties like NBC Universal,as well.
Today, we're going to talk specifically about how you would beat Xfinity their broadband service. And this is an interesting question is jobs-to-be-done even useful in these types of markets where you've got effectively a regional monopoly, and you've got a lot of regulatory authority in who can compete with Comcast. Comcast also has some of the lowest customer satisfaction rankings in the cable industry, which is not known for its high customer satisfaction. So it seems like there would be a lot of opportunity to beat Comcast, because you've got such low customer satisfaction. They've also violated net neutrality practices in the past. They have plans to cap data, so they don't seem to be a particularly customer focused company. And interestingly, the United States ranked 10th in the world on internet speed behind countries like South Korea, Norway, Sweden, and Switzerland. It seemed like there was a lot of opportunity to beat Comcast, specifically their Xfinity service. So could you use jobs-to-be-done and jobs theory to beat Comcast, if you were going after their Xfinity service?
Jared Ranere 2:19
Where we are going to start is trying to figure out what the market is, in other words, who is the key customer and what are the jobs at play in this market? To remind you, the job is the customer is the job beneficiary, the person who benefits from getting the job done. And the job is the goal that the customer is trying to achieve independent of any technology or solution. And so if you look at XFINITY, the customer is pretty straightforward. It's consumers of all kinds. What is the job? When you think about this market as broadband service, it really makes the job rather narrow. And you start to see why it's so hard to compete with Comcast, and why they would have a regional monopoly because they own all the cables that provide broadband service. They lay the infrastructure, it's incredibly expensive to lay your own infrastructure. And in many cases, as Jay mentioned, it's regulated. But that's probably not the job because it's so solution dependent. Broadband service is a technology for some other goal that you're trying to achieve. Why do we want that broadband service? Well, we probably want access to the internet, we want fast internet speeds. But the internet is a technology too,Jay, so what do we do there? Is that a fair job to be done to define?
Jay Haynes 3:46
I think there are what you could consider to be platform level jobs. And new markets are often created with new platforms. For example, the aircraft is a great example. No one needed to ensure aircraft air worthiness before there were aircrafts. And certainly that could change. There could be new technologies, faster trains that replaced airlines. But when there is a platform like the Internet, and there are jobs associated to it, you can still use the same framework and thinking to focus on the customers. And in this case, I think you are right, I think the job here is to access the internet access and network. And that does bring up really interesting questions about how do you go about that as a society, not just as individual competitors? Because the theory here, of course, when you have these regulated monopolies is you're not going to have 50 different internet providers in a single market in a single region. Just because the capital expense to lay all the cable initially is copper, but then delay, fiber optics is very expensive. So what people are willing to pay? You have to get some sort of return on that investment. So you're not going have 50 people build different fiber optic networks. Nor should you really want to have society spend all this money building 50 different fiber optic networks, when one will do. And that's very different than if you're competing building software, you could absolutely have 50 different software companies all writing very similar applications and, and have them all compete. It brings up a ton of questions.
The way to think about this is, certainly you've got different beneficiaries and the end beneficiary, of course, in this case is a consumer or business who's trying to access the network. So yes, that's what they're absolutely trying to do. But in this case, you also have government that has jobs to get done. Governments obviously want competitors to enter markets to do things like lower price on different products and services. Broadband being a good example. But they've also got it figured out how to allocate public resources. Good example, you're not going to have 50 different companies coming through your neighborhood digging up to lay their own fiber optic networks. That would be a problem. So the government's trying to determine who should have these rights and what they should pay for them,etc. Now, one of the problems in this situation is, how do you go forward once you have a company that has the monopoly to keep them competitive? And that's what I think the question,Jared, you're bringing up, which is really interesting. So we've got this technology, which is either to put copper or fiber optic in the ground, get people accessing the internet. But are there other technologies that could get that same job done that are emerging?
Jared Renee 6:47
Right, and we are seeing some competitors explore that area and launch new services using new technologies. So we've got Starry Internet, which is a Boston area company. That's basically piggybacking off of satellite networks, as far as I understand. In fact, their technologies are rather complicated, but it's a new way to deliver the internet that's very fast and inexpensive. They're trying to provide excellent customer service, and they have a pretty high valuation.
You also have Starlink, which is SpaceX's is new satellite internet network. And that's competing with the same technology as something like Direct TV. But evidently, they're able to put more satellites in space and provide much higher speeds. When you look at Starlink's tagline for their beta, they're calling it the internet that's better than nothing. So why is that? Why do I want just better than nothing? How does that connect to getting the job done? Better? I don't understand.
Jay Haynes 7:58
That's a great question. Well, I think we've got a few things going on there. One is, as Clay Christensen likes to say, it's not in consumption. So where the price of getting the job done today is, or just even the technology available to get the job done makes it so hard that people don't even try. And that's where I think you have non-consumption, I think that's really what they're targeting. People who don't have internet access, or very, very slow internet access. They don't have any broadband opportunities.
I have some experience with this in rural parts of California, where there really just wasn't any internet. At one point, years ago, we'd have to use 3G, which, as you may remember, was not very fast, and then have an antenna to amplify it. Just to try and get access to get email, let alone like streaming Netflix. So in that case, I think that that really is a non consumption opportunity. And it also is a segmentation analysis where people just can't get the job done because they also can't afford it.
Can you build new technologies that lower the price and increase the speeds and then essentially compete with Comcast through a different route? You'd be targeting those consumers who are not Comcast customers, but then eventually this could be something that follows the disruption lines. People may remember disruption is where you come in to market your technology initially worse, and you're targeting the low-end of the market. Then over time it gets better. Initially they're targeting these non consumers, but then satellite technology gets better and better. Then they offer direct competitor Comcast. At my home, we can only get Comcast. There is no alternative and I can say from my own customer satisfaction, if they asked me to fill out a survey, I would give it a very low customer satisfaction. Not surprising.
That also does bring up an interesting question about these utilities and the jobs they're trying to get done. One part, of course, they are trying to get me on to the internet. So they're targeting their customers. But they also are targeting their shareholders. A company is trying to create returns for its shareholders. So in that case, they really do need to straddle this providing returns for shareholders, as well as providing the customer value to their customers. So how should they navigate that tension? That's actually a very interesting question.
Jared Ranere 10:43
Every company is trying to do that, to some extent. Every company has shareholders, whether it be in the public markets, or the private investors, or just the company owners without getting outside capital. There are shareholders in every single company, and everybody's trying to create equity value. And so the question is, what is the best opportunity to do so and it seems like the Xfinity part of their business anyways, Comcast is taking a defensive posture. There's an example that Jay brought up in Chattanooga, Tennessee, where they tried to provide their own internet and Comcast sued them for doing so because they were infringing upon the fiber optic land, I guess, that they owned. It's a pretty complicated case. But when you start suing your competitors, that's clearly a defensive posture. In one sense, you can say they're giving up on trying to get the job done better, and they're just trying to protect their turf. It's viable in this industry. Because unlike other markets that we've looked at, where you can pick one need, or one job step, essentially one piece of the job to get done better than the competition, and grow from there. There's a barrier to entry in the internet access job. You can't just do the payment job, part of that job, but not provide Internet service. You can't do the onboarding part of provide Internet access, without actually streaming data back and forth, across your network. So in order to enter the job at all requires a significant investment of either finding your own fiber optic situation, laying your own infrastructure, creating a new technology. That's where this defensive posture comes from. So what happens next? Is that all that Comcast can do to return equity value to shareholders? Is to have a defensive posture and keep competitors at bay who might be providing better service for their customers?
Jay Haynes 12:52
Yeah, that's a great question. And that comes up in platform situations all the time. What additional jobs, can you get done with the platform? And I think that's exactly what you see with Comcast. They're buying NBC Universal because they realize, hey, we've got this platform. And this is where people are gonna pay for more products and services, essentially, for entertainment products and services. You see this across platforms.
Even Apple, of course, which is making an operating system, and a phone, which is a platform. If you look at the number of apps that they're now building themselves, they're building exercise apps. They're now building content. They have Apple TV with Jennifer Aniston, which is just very bizarre if you think about Apple's history, that they're now making TV shows. So should they do that? Well, it's an interesting question.
Jared, you were talking about returns to shareholders, of course, companies just have to keep returning to shareholders and they have to create equity value because at some point, they don't go out of business. But do we really want that as a society? And that's kind of a bigger question answering today. But I can give you a specific example, in California, that led to really bad consequences, and that's obviously PG&E. PG&E is a utility. And I think you can make a serious argument that access to the internet is a utility level playing field. You don't want people to not have electricity, and you don't want people to not have access to the internet. But what happened with PG&E, of course is it became a shareholder owned utility. And then because the part of generating returns to the shareholders is returning them cash in the form of dividends. So PG&E, of course, in order to stay competitive in the capital markets was taking cash and just distributing out to the debt holders and to the shareholders. And what they didn't do is upgrade the safety of our infrastructure here in California to deal with climate change. As soon as we had the right conditions, it just set off. And it's been doing it for years now setting off fires across the country. Now, they went bankrupt. So PG&E did, they were liable. And they set fires that caused enormous damage and burned down entire towns. And as a result, they went bankrupt. But what they didn't do is go collect all that cash back from all those dividends and debt payments they make over the years and say, Okay, now we're gonna invest that in this new infrastructure. They can just declare bankruptcy, and it wipes out their shareholders, but they get to keep going. So that is a bigger question, what happens to these platforms? Because you see it happening all the time in Apple's doing it, Amazon's doing it anybody with a platform is going to try and get more jobs done on that platform. Now, is that the better way to do it? Or do we want more companies getting those jobs done more competitively? That's a good question.
Jared Ranere 15:53
Yeah, I think the utility example is really fascinating, because it goes back to that idea of what jobs are the government trying to get done. And one of the key jobs that government needs to occur is economic productivity. They need to basically optimize or increase the economic productivity of a nation or a state, some sovereign state. And the reason they want to do that is because that's how they collect taxes. The more money that everybody earns, the more tax revenue goes into the government, the more services they can provide. It's a beneficent cycle. When something becomes vital to economic productivity, it then becomes in the government's interest to support that and make sure it doesn't fail.
Electricity is pretty obvious in that regard. Without power, we can't do most of the work that's done in any industry. And in the pandemic, we're seeing that that's even more true around the internet. Not more true than electricity, because you can't have a you can't the internet without electricity. Yet, it's also true for the internet right there. There are many industries right now that are working from home and without internet in the home, the industries are basically coming to a standstill. School is now relying on the internet. So you can't educate your society. You can't have a society that works. And if those two things stop, your economic output goes to basically zero. Now you if the government's going to try to get that job done, they're going to try to provide a solution to this internet access problem, if it's not working out from private companies. So perhaps the most fierce competitor to something like Comcast is going to be the government.
Jay Haynes 17:45
Yeah, it's an interesting question. What is the role of government and how do they figure out these complicated problems? And I don't think having the government necessarily be the provider of the services always works out well. Extreme case you get the Soviet Union. But I do think the way jobs-to-be-done can help us figure this out, which is essentially what we're asking is, if you're to compete with Comcast, because clearly, I think the world needs a better service than Comcast, and I think you're right, in a pandemic, where everybody's working from home, people are doing school from home etc. We just like to be incredibly dependent on being online and being connected. And in some ways, it's even better. If this shifts the society to not commuting as much and not traveling as much to meetings, and we do everything through zoom and Microsoft Teams, Google Meet and whatever other applications, that's fantastic. It lowers our carbon output. So, that could be a good long term benefit. But then the question is, so how do you beat Comcast? They just have this entrenched $50 billion monopoly and Xfinity. And I think you're right, one way is new technology. If there's satellite 5G is coming now 5G still needs to connect to fiber networks and obviously, 5G travels about 250 feet relative to 4G which wirelessly travels much farther. Then what do you do from a competitor standpoint? So there can be technologies like you talked about.
It also can be helping the government rethink these platforms, and allow different types of competition. I can speak from personal experience, I would absolutely love competition. My street literally has some infrastructure, Comcast problems that they just refuse to fix. We've had network guys out here trying to fix this and they've identified it's at the street level and Comcast has recognized it, but they're not motivated to fix it. I can't go anywhere. So I just have to put up with it. So that is where you really do want to think through the jobs that the government is trying to do as well as the jobs that the individual companies are trying to do.
Jay Haynes 20:09
I think there's a lot of different topics we could dive into and that come out of this discussion. But I think in conclusion, if you were to try and be Comcast, you could do it from a technology standpoint. And that would be great if there are new technologies that just make them direct competitors to Comcast, like 5G or satellite or some combination. And you can still use jobs-to-be-done to look at those. You want to figure out what the core underlying job of accessing the internet and that's a very complicated job. The other is to think about the role of government and the job governments are trying to get done.
Jay Haynes 20:44
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